The Sphere Entertainment Company is a global entertainment company. It was announced today that Sphere Entertainment Inc. (NYSE: SPHR) (the "Company" or "Sphere Entertainment") has priced a $250 million aggregate principal amount of 3.There has been a private offering of 50% convertible senior notes due 2028 to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A of the Securities Act of 1933, as amended (the "Securities Act").. As part of the offering of these notes, the Company has granted the initial purchasers the option to purchase, for settlement within a 13-day period beginning on the day on which the notes are issued, up to a total of $33 more, for settlement within that same period..The aggregate principal amount of the notes is $75 million. It is anticipated that the offering of the notes and the capped call transactions described below will close on December 8, 2023, subject to customary closing conditions.
It is anticipated that the offering of the notes and the capped call transactions described below will close on December 8, 2023, subject to customary closing conditions.
This note will be the senior unsecured obligation of Sphere Entertainment that will pay interest semi-annually on June 1 and December 1 of each year, beginning on June 1, 2024, at a rate of 3% per year, beginning on June 1, 2024..It is expected to increase by 50% each year. It is expected that the notes will mature on December 1, 2028, unless they are redeemed, repurchased, or converted earlier as per their terms and conditions. In the beginning, the conversion rate for the notes will be 28 percent.There are 1591 shares per $1,000 principal amount of notes, which is equal to an initial conversion price of approximately $35 per share..This amount is based on the share price of the Class A common stock of Sphere Entertainment and is subject to adjustment according to the terms of the notes. It is estimated that the initial conversion price of the notes represents a premium of approximately 25 percent.In comparison to the last reported sale price of $28, this is a decrease of 0%.On December 5, 2023, the New York Stock Exchange will list Sphere Entertainment's Class A common stock at a price of $41.45 per share. Prior to September 1, 2028, the notes will be convertible only upon fulfilling certain conditions and during certain periods, and, thereafter, the notes will be convertible at any time up until the close of business on the second scheduled trading day immediately preceding the maturity date, which will take effect at the close of business on September 1, 2028.. As a result of the conversion, Sphere Entertainment will pay or deliver, depending on the case, cash, shares of Sphere Entertainment's Class A common stock, or a combination of cash and shares of Sphere Entertainment's Class A common stock, at its sole discretion.
As a result of the conversion, Sphere Entertainment will pay or deliver, depending on the case, cash, shares of Sphere Entertainment's Class A common stock, or a combination of cash and shares of Sphere Entertainment's Class A common stock, at its sole discretion.
According to Sphere Entertainment, the net proceeds from the offering are estimated to be approximately $217 million..A total of $8 million (or approximately $250 million).The value of the notes will be determined once the initial purchasers exercise their option to purchase additional notes in full, after deducting the initial purchasers' discounts and commissions and the estimated expenses payable by Sphere Entertainment (assuming the initial purchasers exercise their option in full).. The amount that Sphere Entertainment intends to spend on the project is approximately $12 million.It is estimated that approximately $4 million of the net proceeds from the offering of the notes will be used to fund the cost of entering into the capped call transactions described below in connection with this offering.. It is expected that Sphere Entertainment will use the remainder of the net proceeds generated by the offering for general corporate purposes, including capital for growth initiatives related to Sphere Entertainment
It is expected that Sphere Entertainment will use the remainder of the net proceeds generated by the offering for general corporate purposes, including capital for growth initiatives related to Sphere Entertainment
It is expected that Sphere Entertainment will use a portion of the proceeds from the sale of the additional notes in order to enter into additional capped call transactions if the initial purchasers exercise their option to purchase additional notes. In addition to using the net proceeds from the sale of the additional notes for general corporate purposes, the remainder of the net proceeds will be used for capital investment for Sphere's growth initiatives.
The price of the notes will be determined by Sphere Entertainment entering into capped call transactions with one or more of the initial purchasers and/or their respective affiliates or other financial institutions (the "hedge counterparties") in connection with the issuance of the notes.. In the capped call transactions, the same number of shares of Sphere Entertainment's Class A common stock that will initially underlie the notes is covered, subject to customary anti-dilution adjustments substantially similar to those applied to the notes.
In the capped call transactions, the same number of shares of Sphere Entertainment's Class A common stock that will initially underlie the notes is covered, subject to customary anti-dilution adjustments substantially similar to those applied to the notes.
The cap price of the capped call transactions relating to the notes will initially be approximately $42.62 as a result of the capped call transactions relating to the notes, which represents a premium of approximately 50% over the last reported sale price of Sphere Entertainment's Class A common stock on the New York Stock Exchange on December 5, 2023, subject to certain adjustments that may be necessary in the future.
It is generally expected that the capped call transactions will reduce the potential dilution to Sphere Entertainment's Class A common stock upon any conversion of notes as well as offset any potential cash payments. As the case may be, Sphere Entertainment is required to make payments in excess of the principal amount of the converted notes, subject to a cap on the amount of reductions and/or offsets.
The hedge counterparties or their respective affiliates of the hedge counterparties are expected to purchase shares of Sphere Entertainment's Class A common stock in connection with establishing the initial hedges of the capped call transactions, and/or enter into derivative transactions with respect to Sphere Entertainment's Class A common stock concurrently with, or shortly after, the pricing of the notes, including from, or in partnership with, certain investors in the notes, as the case may be.. It is possible that this activity may increase (or reduce the size of a decrease in) the market price of Sphere Entertainment's Class A common stock at that time, or increase the price of the notes when they trade at that time.
It is possible that this activity may increase (or reduce the size of a decrease in) the market price of Sphere Entertainment's Class A common stock at that time, or increase the price of the notes when they trade at that time.
In addition, the hedge counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Sphere Entertainment's Class A common stock and/or purchasing or selling Sphere Entertainment 's Class A common stock or other securities of Sphere Entertainment in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (are likely to do so, to the extent we exercise the relevant election under the capped call transactions, following any repurchase, redemption or conversion of the notes (whether upon a fundamental change or otherwise)). In addition, this activity could lead to or prevent an increase or a decrease in the market price of Sphere Entertainment's common stock or its notes, which could impact the ability of noteholders to convert the notes. As far as the activity occurs during any observation period pertaining to a note conversion, it may have an impact on the amount of cash and/or the number and value of shares of the Company's class A common stock that a noteholder receives upon converting his or her notes to the Company.
In addition, this activity could lead to or prevent an increase or a decrease in the market price of Sphere Entertainment's common stock or its notes, which could impact the ability of noteholders to convert the notes. As far as the activity occurs during any observation period pertaining to a note conversion, it may have an impact on the amount of cash and/or the number and value of shares of the Company's class A common stock that a noteholder receives upon converting his or her notes to the Company.
The notes were offered to persons reasonable believed to be qualified institutional buyers in accordance with Rule 144A of the Securities Act of 1933. The offer and sale of the notes and the shares of Class A common stock issuable upon conversion of the notes, if any, have not been registered under the Securities Act or any other securities laws in any other jurisdiction, and it is not permissible to offer or sell the notes, or any of the shares, until registration or an exemption from such registration requirements has been obtained.
The offer and sale of the notes and the shares of Class A common stock issuable upon conversion of the notes, if any, have not been registered under the Securities Act or any other securities laws in any other jurisdiction, and it is not permissible to offer or sell the notes, or any of the shares, until registration or an exemption from such registration requirements has been obtained.
The purpose of this press release is not to offer or solicit the purchase of any securities, including the notes or Sphere Entertainment common stock, and it shall not constitute an offer to sell or solicit an offer to buy any securities. There shall not be any sales of securities in any state or jurisdiction where such an offer, solicitation or sale would be illegal prior to being registered or qualified under any securities laws in that state or jurisdiction.
It is our pleasure to introduce you to Sphere Entertainment Co. 
The Sphere Entertainment Company, Inc.. As a premier live entertainment and media company, we provide a wide range of services. In addition to the Sphere, the Company has created a next-generation entertainment medium, powered by cutting-edge technology to redefine the future of entertainment as we know it. It is expected that the first Sphere venue will open in Las Vegas in September 2023. Furthermore, MSG Networks, a subsidiary of the company, operates two regional sports and entertainment networks, the MSG Network and the MSG Sportsnet network, as well as the direct-to-consumer streaming service MSG+, which offers a wide range of live sports content and other programming to consumers.
Furthermore, MSG Networks, a subsidiary of the company, operates two regional sports and entertainment networks, the MSG Network and the MSG Sportsnet network, as well as the direct-to-consumer streaming service MSG+, which offers a wide range of live sports content and other programming to consumers.
Statements that are forward-looking
It is possible that this press release contains statements that constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, for example, statements relating to the timing and completion of the offering of the notes and the capped call transactions, as well as the anticipated use of the proceeds from these offering.. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments or events may differ materially from those in the forward-looking statements as a result of various factors, including financial community perceptions of the Company and its business, operations, financial condition and the industries in which it operates and the factors described in the Company's filings with the Securities and Exchange Commission, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein. There is no obligation on the part of the Company to update any forward-looking statements contained in this document
There is no obligation on the part of the Company to update any forward-looking statements contained in this document
Getting in touch
Ariel Danes, CFA, Investor Relations and Financial Communications, (212) 465-6072
The contact information for Justin Blaber is: Financial Communications (212) 465-6109
Please contact Grace Kaminer, Investor Relations, at (212) 631-5076 if you have any questions
The source of this information is Sphere Entertainment Co.
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